Main navigation - Mobile

With the new capital structure in place, the company expects to achieve $200 million in annual cash interest savings compared to fiscal year 2016.

Avaya has gotten approval from the U.S. Bankruptcy Court for the Southern District of New York for its second amended Chapter 11 restructuring plan, setting the stage to emerge from debt restructuring by the end of the year.

The vendor said it plans to have $2.93 billion of funded debt and a $300 million senior secured asset-based lending facility available upon emergence from Chapter 11 protection.

This is a substantial reduction from the approximately $6 billion of debt on its balance sheet when Avaya it filed for Chapter 11 in January.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceTelecom!

The Telecom industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceTelecom as their must-read source for the latest news, analysis and data on the intersection of telecom and media. Sign up today to get telecom news and updates delivered to your inbox and read on the go.

With the new capital structure in place, the company expects to achieve $200 million in annual cash interest savings compared to fiscal year 2016.

“I want to thank our customers and partners for their continued support,” said Jim Chirico, president and CEO, in a release. “The trust and loyalty of our global customer base and partner network have played a vital role in Avaya’s success throughout this process.”

While this is a positive move for Avaya, competitors like Genesys are wasting no time to poke holes in the vendor’s strategy.

Genesys said that in 2017, 250 companies worldwide have migrated from legacy contact center systems to Genesys’ platforms. The company claims that 60% of those companies are cutting ties with Avaya, with the remainder from Cisco and other vendors.

Paul Segre, CEO of Genesys, said in a blog post that Avaya will likely continue to struggle even as it reemerges from Chapter 11 because it has not dedicated enough capital in next-gen products and platforms.

“Avaya is playing catch-up after years of underinvestment, and their customers have most certainly felt the impact,” Segre said in the post. “Even with massive investments, they will have missed these innovation cycles and certainly won’t catch up through disinvestment.”

Segre said that by contrast, “Genesys continues to invest in technology at a rate of more than $200 million annually.”